Trade Policy / 9 min read
For years, Section 321 let a brand ship an order worth $800 or less into the United States with no duty and almost no paperwork. That is what made "hold inventory overseas, ship each order across the border" work. It no longer does. The exemption was withdrawn for goods from China and Hong Kong in May 2025 and for every other country at the end of August 2025, and every one of those shipments now needs a customs entry and duty like anything else.
This guide explains what Section 321 was, exactly what changed and when, what every shipment needs now, and — the part most write-ups skip — what to do about it. Our view is straightforward: for most brands that relied on de minimis, the best alternative is to bring inventory into the United States in bulk and fulfill orders from a foreign trade zone. The rest of this page explains why, and where that answer does not fit.
A note on dates. The rules in this area have changed several times in two years, and effective dates have been amended more than once. Confirm any date below with your customs broker against current CBP guidance before you build a plan or make a customer commitment on it.
What This Covers
Section 321 is a part of the Tariff Act of 1930 (19 U.S.C. 1321). It created what everyone calls the de minimis exemption: if the goods one person imported in one day were worth $800 or less in total, they could come in free of duty and tax, with a much lighter filing than a normal customs entry. The limit was $200 until 2016, when Congress raised it to $800.
Two things made it the backbone of cross-border ecommerce. Qualifying parcels paid no duty, and they cleared through a simplified filing type (known as Entry Type 86) instead of a full customs entry. That combination meant a brand could keep inventory in China, Vietnam, or Mexico, sell to a U.S. customer, and send the parcel straight across the border — no container, no broker, no duty.
Two details in the law matter for what comes later. The $800 limit applied per person, per day, with all their shipments added together. And the exemption was measured at the moment goods entered the country — not later, when they were sold. Both details are why the workarounds people tried did not hold up.
It happened in stages over about two years, through executive orders, a law passed by Congress, and CBP rulemaking.
| Date | What happened |
|---|---|
| May 2, 2025 | Executive Order 14256 ended de minimis treatment for goods from China and Hong Kong. |
| July 4, 2025 | The One Big Beautiful Bill Act repealed the commercial de minimis exemption in law, effective July 1, 2027. |
| July 30, 2025 | Executive Order 14324 extended the suspension to goods from every other country. |
| August 29, 2025 | The worldwide suspension took effect. Low-value commercial shipments became subject to duty and a customs entry, regardless of origin. |
| February 28, 2026 | Duty on postal shipments moved to a percentage-of-value basis, replacing the temporary flat per-item charge. |
| June 24, 2026 | CBP published a rule suspending the exemption indefinitely for everything arriving outside the international postal network. |
One thing that did not change it back: a February 2026 Supreme Court decision limiting tariff authority under the International Emergency Economic Powers Act. The de minimis suspension rested on separate authority, so the ruling left it in place. No restoration date has been announced, and the statutory repeal in July 2027 closes the door regardless. Any plan that assumes the exemption returns is a bet, not a strategy.
The practical burden falls on paperwork and data rather than on freight. Five things changed for every parcel that used to clear under de minimis.
Put simply: a per-shipment filing cost now sits on top of the duty on every single order. For a brand shipping thousands of parcels a month from overseas, that arithmetic is what has pushed inventory into the United States.
Want to see what this change costs on your own order book?
Request an FTZ Savings ConsultationNo — and it is worth being direct about that, because the opposite claim circulates. The idea sounds reasonable: bring goods into the U.S. in bulk, put them in a foreign trade zone where duty is not yet owed, and then ship each customer order out one at a time as its own sub-$800 "import." CBP looked at exactly that model in 2018, before any of the suspensions, and said no.
The ruling is HQ H282601, issued in response to a request from the American Apparel and Footwear Association. CBP's reasoning came down to the two details from the statute: importation happens when the goods arrive in the country, not when they leave the zone, and the exemption belongs to the party that imported them. So the bulk shipment is the import, its value is far above $800, and the customers who buy later were never the importers. CBP reached the same conclusion in HQ H275567.
That was true before the suspension and it is true now. Anyone pitching a zone as a way to keep de minimis alive is pitching something CBP has already ruled against. But that is the wrong question anyway. The right question is what replaces de minimis — and that is where a zone earns its place.
"De minimis was a clearance shortcut, not a tariff rate. You do not replace a shortcut by looking for another one. You replace it by moving the inventory."
For most brands that built their U.S. business on de minimis, this is the answer. Instead of thousands of small parcels each crossing the border on its own, bring the same goods in on a container, hold them in a warehouse that operates as a foreign trade zone, and ship customer orders domestically from there. Duty is still owed on what you sell in the United States. What changes is when you pay it, how many filings it takes, and how fast the customer gets the box.
Here is the same brand under both models.
| Parcel-by-parcel from overseas | Bulk import into a U.S. foreign trade zone | |
|---|---|---|
| Customs filings | One per order — thousands a month, each with a broker fee | One per container coming in, then one consolidated filing per week as orders ship |
| When duty is paid | At the border, on every parcel, before the customer has it | Only when goods leave the zone to fill an order. Inventory sitting on the shelf has not been taxed yet |
| Goods you re-export | Duty paid on entry, claimed back later if at all | Ship to Canada or Mexico straight from the zone and U.S. duty is generally never paid on those units |
| Delivery time | One to three weeks, with a border crossing in the middle | Domestic ground, often two days |
| Returns | Often written off — not worth shipping back across the border | Domestic, inspected, and back in sellable inventory |
| Working capital | Low — little inventory held in the U.S. | Higher — you own a season of stock in the U.S. This is the real trade-off |
A zone is a compliance program with a financial return, and it earns its cost only when there is enough volume behind it. Honest reasons to hold off: your U.S. demand is still being tested and hard to forecast at the item level; order volume is low enough that committing a season of inventory outweighs the per-order savings; the assortment turns slowly or goes stale; or the United States is a minority share of a business served from one offshore position. In those cases a nearby-country hub with duty prepaid, or plain domestic warehousing without zone status, may be the better step for now.
Classification, origin documentation, and valuation belong in the plan under either model, because they now set the duty rate on every line. The move to a domestic inventory position is worked through in more detail in FTZ fulfillment after de minimis, and the program as a whole is explained in the foreign trade zone guide.
Section 321 of the Tariff Act of 1930 (19 U.S.C. 1321) is the law behind the de minimis exemption. It allowed goods worth $800 or less, imported by one person in one day, to enter the United States free of duty and tax with a simplified filing.
No. De minimis treatment was withdrawn for goods from China and Hong Kong in May 2025 and for all countries on August 29, 2025. It is suspended indefinitely and repealed by statute effective July 1, 2027. Confirm current status with a customs broker before relying on it.
The $800 figure still appears in the statute, but the duty-free benefit attached to it is suspended, and the July 2025 legislation repeals the commercial exemption outright effective July 1, 2027.
For most brands, importing in bulk and fulfilling orders from a U.S. foreign trade zone. One customs entry covers a container instead of one per parcel, duty is paid only when goods leave the zone to fill an order, a week of shipments can be consolidated into one filing, and customers get domestic two-day delivery with domestic returns. It suits brands with consistent U.S. demand and enough volume to carry inventory here.
No. CBP ruled in HQ H282601 that goods imported in bulk and placed in a foreign trade zone are not eligible for the Section 321 exemption when shipped out one order at a time, because the import happened when the bulk shipment arrived and the exemption belongs to the importer, not to the customers who buy later.
A formal or informal customs entry filed through CBP's ACE system by a licensed broker or other qualified filer, with a 10-digit Harmonized Tariff Schedule code on each item. The simplified Entry Type 86 filing is no longer available for these shipments.
Postal shipments are handled under their own rules, and duty on them now runs on a percentage-of-value basis. Those rules have changed several times, so confirm the current mail requirements with a broker.
Where the warehouse is already activated by CBP, a full setup typically takes 30 to 60 days: reviewing the numbers, setting up the importer and broker, mapping item and tariff data into the warehouse system, testing, and go-live. Product complexity, systems, and CBP workload can extend that, so it is planned rather than promised.
Compliance note: The rules on low-value shipments have changed repeatedly, and dates and requirements may be amended again. This article is general operational information, not customs or legal advice. Duty treatment, eligibility, and filing obligations depend on the goods, their origin and value, zone status, additional tariffs, other agency requirements such as FDA, and current CBP guidance. Confirm every date and requirement here with your customs broker and trade counsel before relying on it.
Request an FTZ Savings Consultation
Send twelve months of order and entry data. KDS will compare your current per-parcel cost against a bulk import fulfilled from a foreign trade zone, show where the zone changes the result and what it costs to run — and tell you plainly if it does not pay for you.
About the Author
Eric Ritchey, Vice President of Sales, Komar Distribution Services
Eric Ritchey helped run the foreign trade zone program at Komar Distribution Services and works with brands and importers evaluating zone programs, warehousing, fulfillment, and nationwide 3PL strategy.